Q: Where can I find funding for my social enterprise?
A: Social enterprises by and large are characterised by a mixed economy of funding, part grant, part contract, part sales.
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Q: Who funds Social Enterprise ?
A: Whereas many foundations and trusts may not be familiar with a social enterprise model the funders below specifically target finance at social enterprises.
- Big Invest - A Big Issue foundation initiative to provide funding for start-up social enterprises.
- Enterprise4Inclusion - DEFRA sponsored fund aimed at rural social enterprise.
- Esmee Fairbairn - Long standing foundation funds social enterprises under a programme entitled Social change: Enterprise and Independence.
- Scarman Trust - Foundation that provides seed corn funding to "can-do" individuals.
- Unltd. -The foundation for social entrepreneurs will provide seed corn funding to individuals that are working to make positive difference to their community.
Q: Where can I find a Grant?
A: If you wish to cast your search for grants more widely the best place to start is probably one of the online grant directories. Generally they charge for full access to their databases, but this may represent a worth while investment.
- BusinessLink Grants and support directory.
Offers free grant searches for businesses in the UK. - Government grants
Five departments, excluding the DTi, have collaborated to provide a free directory of government funding for voluntary and community groups. - J4B Grants
Provide a comprehensive grants database for both busines and community organisations. Limited searches are available free of charge. Charges subscription for full access - Trust funding
The Directory of Social Change compiles a directory of all charitable trusts and foundations in the UK which is available online through the Trust funding website. Charges subscription for access
- Unlocking the potential
A guide to non-grant finance for social enterprises published by the Social Enterprise Coalition. - Climbing the ladder
A guide to financing social enterprise from Social Enterprise London. Covers financial planning, finding finance and monitoring financial performance.
Q: Can I borrow money from Lenders?
A: Social enterprises often have problems borrowing from mainstream lenders due to lack of an asset base or the fact that their profit margins are clouded by social reinvestments. Below is a list of specialist social enterprise focused lenders.
- Charity Bank
A bank set up and run by the Charities Aid Foundation to provide finance to the third sector - Futurebuilders
Government sponsored loan fund that invest in capacity building for third sector enterprises delivering public services. - Triodos
A socially focused bank. Also rund the ethical share exchange ethex - Unity Trust Bank
A bank originally set up by the UK Trade Union movement, now provides loans to social enteprises.
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Q: Equity Investment and Venture Capital
A: If you acquire capital through a loan you will have to pay interest charges. For many businesses a preferable option is to sell some of the equity (shares) to investors, who then share in the returns from the business.
However, selling equity has its own pitfalls. Public share issues are heavily regulated and will incur substantial legal costs. More importantly, many investors will demand a say in the direction of the business, potentially jeopardising the social mission as the investor seeks a financial return.
To avoid this it is important that any investor both understands and is sympathetic to the aims of the social enterprise.
Below is a list of organisations that specialise in equity and equity like investment in social enterprise.
Social Venture Funds
- Adventure Capital Fund
Provide long term investment in third sector organisations to develop their capacity for enterprise - Bridges
Venture capital focused on the most deprived areas of the UK - Impetus Trust
Impetus aims to identify and provide long term investment and capacity building for leading third sector organisations. - Venturesome
A social investment fund from the Charities Advisory Trust - International Association of Investors in the Social Economy
A global network of socially and environmentally minded financial institutions. - UK social investment forum
Network promoting socially responsible investment.
If you are interested in orthodox venture capital networks you can try:
- British Venture Capital Association
- National Business Angels Network
Q: Am I a social enterprise ?
A: Social enterprises are incredibly diverse, almost as diverse as businesses are. So there are childcare groups, wind farms, corner shops and property companies that are all social enterprises.
The key feature is not what you do, or your legal form. The key feature is what the business aims to do and what it does with its profit.
Basically is the aim of the business to do good and does it invest its profits in doing that?
As a rough guide, if your business works to promote an aim that could be charitable, be that education, economic development, promotion of the arts or another (for a list of charitable objects see the charity commission) and does not distribute profit to private individuals then likely you are a social enterprise.
See what you or your organisation have in common with social enterprises by going to some common characteristics.
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Q:What is a social entrepreneur ?
A: Social entrepreneurs do for society what entrepreneurs do for business - they spot new ways of solving problems or harnessing under used resources, they implement these and create huge amounts of value. For social entrepreneurs this means positive social change rather than simply cash.
Just as an entrepreneur finds innovative solutions in business (think James Dyson and bagless vacuum cleaners), social entrepreneurs find innovative solutions to social problems (think Florence Nightingale and hospitals or Mohammed Yunus and microcredit). Both aim to find a new and better way of doing things or make use of underused resources.
The approach of finding, supporting and networking social entrepreneurs or "change agents" was developed by Bill Drayton of the Ashoka network in the 70s. It has since proved to be a remarkably efficient and effective approach to promoting social change.
A number of networks promote innovative individuals that work to change their communities and societies for the better.
UK networks
- Community Action Network
A support and training network for social entrepreneurs in the UK - Scarman Trust
Provides funding and support to individuals who want to make changes to their community - School for Social Entrepreneurs
Offers courses to help develop ideas and organisations that will have a positive impact on society - Unltd.
Offers funding and support to individuals running socially beneficial projects
- Ashoka
The original social entrepreneur network - Echoing Green
A social investor that focuses on the world's emerging leaders - Omidyar
The Omidyar network funds leading organisations with innovative solutions to the challenges of today. These include the creative commons programme, open source technology companies such as SourceForge.net and range of community based intitiatives such as Youth Build. - Schwab
A global network of social entrepreneurs from the founder of the World Economic Forum (Davos), based in Geneva. - Skoll Foundation
Aims to achieve systemic change through supporting and networking social entrepreneurs.
